It is has been a rewarding bull market for those who bought stocks such as Coca-Cola (NYSE: KO), ExxonMobil (NYSE: XOM), Wal-Mart (NYSE: WMT), and others during The Great Recession. As to be expected, there is now increasing discussion of a correction that will take away much of the profits. There are three reasons why investors should stay in the stock market in blue chips such as ExxonMobil, Wal-Mart, and Coca-Cola.
The global economy continues to grow.
Countries around the world are still struggling to recover from The Great Recession. In addition to that, many are entering the consumer class around the world. Africa looks to be the new growth area. Coca-Cola will benefit first as it is in every around the world (chart below). When discretionary income increases, eating out comes first. More than likely, Coca-Cola will be served at the restaurant. Next comes shopping at Wal-Mart. Then filling up the motor vehicle at ExxonMobil. It is an established pattern that will continue into the future!
Central bankers favor the stock market.
The low interest rate policies around the world make buying equities preferable. Yields are too low for fixed income investments to be appealing. Investors can do far better in the stock market.
Stocks pays investors to be the owners.
More and more publicly traded companies are paying dividends or increasing the amount. Coca-Cola, ExxonMobil, and Wal-Mart are “Dividend Aristocrats.” To be a Dividend Aristocrat a company must have raised the amount of the dividend annually for a least the past 25 years. That means that the owners get a raise each year simply for not selling.
For investors, the stock market continues to be the long term asset of choice.
Being paid not to sell makes it even more appealing. If there is a correction, it should looked upon as a chance to buy at a discount. For the long term, stocks will continue to reward owners!